> Nate’s article links to a comment in which he says the US has no legal cooperative structure “except for limited state-specific exceptions”. I don’t know why those state-specific laws for cooperatives don’t count - they aren’t in any way restricted to operating within the organizing state.

My guess since he’s talking about IRS rules is because the IRS doesn’t recognize those exemptions specifically and so it’s irrelevant for the federal structure of the company which they also have to have. Technically speaking even LLCs don’t really exist at the federal level. The IRS does note that it is a legal structure that states provide, but also notes that depending on how you’re structured, they will treat you as either a non-entity (basically pass through, like a sole proprietorship), as a partnership (collective pass through, no liability shields) or as a full corporation (S or C corp). There is a little bit in Subchapter T around taxing businesses that operate under a “cooperative basis” but it still seems like you’re still either a corporation or a partnership

Oh, the example I gave is still a corporation for tax purposes, for sure. And there’s nothing wrong with that. But it doesn’t have shares in the sense that can be bought or sold or even profited from upon redemption, unless I guess the coop were to liquidate in which case the value they get for their membership interest might be higher or lower than they paid. (It’s highly unlikely ever to liquidate - it’s been responsibly managed financially for over 50 years.)

They only have member/owners who are entitled to exactly one vote by virtue of having made the rather nominal member investment (and not having redeemed that investment after leaving the coop), or having joined too soon before the vote to have yet missed the deadline to make that investment.

When I say rather nominal member investment, I mean $100, or $10 for people receiving certain low-income government benefits. (They also have a once-per-lifetime non-refundable joining fee of $25 or $5 respectively.) Nothing like the $100k example Nate gave in his comment for a dominant shareholder not happy with the prospect of being outvoted by others with much smaller investments.